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What you need to know - Tasmanian HomeBuilder and the Federal HomeBuilder Stimulus Package

On 6 July 2020 the State Government released further information on the Tasmanian and the Federal HomeBuilder stimulus packages.

The Federal HomeBuilder stimulus package will operate in tandem with the State HomeBuilder grant or the First Home Owner grant. Eligible applicants will be able to benefit from at least two of the schemes but cannot benefit from both the First Home Owner grant and the Tasmanian HomeBuilder grant.

The Tasmanian government guidance on the Tasmanian and Federal HomeBuilder grants are both available on the State Revenue Office (SRO) website here.

Information about the Federal Homebuilder grant and the Tasmanian HomeBuilder grant are detailed below.

PACKAGE FEDERAL HOMEBUILDER PACKAGE TASMANIA HOMEBUILDER PACKAGE
Grant amount $25,000 $20,000
Work types covered • Contract to build (house and land package)
• Contract to build on land your client already owns
• Contract to purchase a new home (off the plan or speculative home).
• Substantial renovation work, including ‘knock-down rebuild’. except additions to property such as swimming pools, tennis courts, outdoor spas, saunas, sheds or garages (unconnected to property).
• Contract to build (house and land package)
• Contract to build on land your client already owns
• Contract to purchase a new home (off the plan or speculative home).
• Demolition and building of a new home (‘knock-down rebuild’).
Work types not covered • Additions to property such as swimming pools, tennis courts, outdoor spas, saunas, sheds or garages (unconnected to property).
• Stand-alone granny flats
• Work carried out by owner builders and investors
• Substantial renovations
• Work carried out by owner builders and investors
Contracts must be signed between 4 June 2020 and 31 December 2020.
Warning – contracts that replaced a contract signed before 4 June 2020 may not be eligible contracts
Income caps • $125,000 per annum for an individual applicant
• $200,000 per annum for a couple
for the 2018/2019 or 2019/2020 financial year
Construction timeframes Building work must commence within 3 months of date of signing contract.
Extension of up to 3 months may be granted by State Revenue Office if sufficient grounds, such as delay in obtaining building approval.
Commencement reached when either:
• Foundations are laid; or
• If no foundations, SRO decision
Extension of time The SRO may allow an extension of time for commencement for up to further three months if delays are unforeseen and outside the control of the parties to the contract.

Further information can be found here and identifies the following types of delays that may, generally, be considered to provide a reasonable basis for an exercise of the discretion:
• delays in obtaining council approvals;
• difficulties in obtaining construction materials and/or sub-contractors;
• unexpected delays in obtaining bank finance;
• inclement weather, where the disruption is substantial;
• health problems relating to, or the death of, a person critical to the commencement of the project;
• prolonged industrial disputes;
• significant delays in the issue of title caused by the Land Titles Office; or
• natural disasters.

Inadequate preparation before the building contract is signed is not a valid reason for an extension.
Construction criteria • Owner-occupied as principal place of residence.
• Property must be in Tasmania
• Property must be fixed to the land (no mobile homes).
When will the grant be paid?

New builds with finance: the Grant may be paid prior to completion and directly to the mortgage account in time for the first drawdown on the loan, or for settlement. A letter must be provided to confirm finance approval, scheduled settlement date, bank account details and other supporting evidence must be provided.

Substantial renovations: once proof of payments of a least $150 000 of the contract price having been made to the builder.

New builds without finance: on issue of the occupancy certificate

Off the plan purchases: At completion and settlement.
Applicant Applicant must be:
• Natural Person (not a company or trust)
• 18 years or over
• An Australian Citizen
Joint applicants must be married or in a significant relationship
Implementation SRO
Property value caps • New home $750,000 (property value not to be exceeded including house and land).
• Existing property not to exceed $1.5 million.
Contract price cap • Contract value for new home not to exceed $750,000 (including house and land)
• Contract value of substantial renovation between $150,000 and $750,000
Builder criteria All building work must be undertaken by licenced building builder
Tax Non-taxable
Timeframes for application Application must be made after the contract is signed and before 1 January 2021
Integrity measures • Related parties to the building contract precluded (this includes cousins, uncles, aunts, nephews, and nieces as well as related company and trust)
• Inflated contract prices prohibited
• If value of transaction changes the amount declared in application and the new value breaches the monetary limits you must notify the SRO within 14 days and will be required to repay the grant
• One grant per lot of vacant land for new detached home construction.
• One grant per dwelling for each off the plan contract by an eligible applicant.
• No replacement transactions allowed.

Application Form

The application form for the client/s to complete is available here and the Tasmanian Revenue Office has developed detailed guidelines.

The client/s will have to provide personal information about their income and about the building contract. They will need to supply evidence that the builder is licensed and provide a copy of the building contract.

The client/s have to sign a statutory declaration when they complete the form. While builders can provide information to help clients prepare forms they should leave the actual completion of the form to the clients as the clients have to declare that the contents are true and correct.

Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice

Current at: 14 July 2020
HIA ref no: TFSINP1349